Thanks :) Yeah decided to go with tile. So sand cement is ok over existing tiles if I prep them first? Only problem is, the new pad can only be about 30mm at it's thickest (leaving up to 15mm for tiles) otherwise it'll end up being higher than the hallway floor. So I either need to make the fall shallower or not bother with the waste and make it all level. If I made it level, could I use levelling compound at that thickness or would deck mud/sand cement be the best option? Also, should I be putting in mesh for strength? (I know I should (and will) ask the local hardware what they suggest, but it's great to have suggestions from the Houzz community also)

Get the professional sander guys in to repair the living areas and kitchen but don't go too dark with the stain as it will kill the lovely grain in the matai. I'm thinking a couple of tones richer than the timber knots showing in your photo, definitely no yellow tone at all. In NZ stepping on to carpet especially in a kiwi winter is so much nicer than a cold floor board shock!!! A nice area rug for the lounge and you're done.

Hi Luke, thanks for your reply. Yes, there is existing plumbing but we need to create a gradient somehow on the wood floor. Concrete floors can be ground to create the gradient but need to come up with some other solution with the wood.

To me it looks like it would be better to have a smaller kitchen as being a 1 bedroom place the living/ kitchen area is quite small. I think having the essentials along the bedroom wall is good but the island makes the living area too small in the first plan, and in the second the cabinets make the walkway too narrow. I would put sink, fridge, oven along the bedroom wall then make any other bench and storage space more like moveable furniture to make the living area seem bigger. The kitchen may be able to be shut off behind doors (a bit like a euro laundry) when not in use to make a much bigger living room, especially if it isn't used a lot.